August 28, 2018
Company name:
Representative:Inquiries:Tel:ES-CON Japan Ltd.
Takatoshi Ito, President &Representative Director(TSE 1st Section, code: 8892)
Minoru Nakanishi, Senior
Managing Director+81-6-6223-8055

Notice on Business Partnership with Chubu Electric Power Co., Inc.
and Secondary Offering of Shares
ES-CON Japan Ltd. (ES-CON Japan) announces that it resolved at its board of directors meeting held on
August 28, 2018 to enter into a business partnership (hereinafter the “Business Partnership”) with Chubu
Electric Power Co., Inc. (Securities Code: 9502) (hereinafter “Chubu Electric Power”).
I. Overview of Business Partnership
1. Purpose and Reason for Business Partnership
The corporate group (number of companies as of August 28, 2018, hereinafter “ES-CON Japan Group”),
composed of ES-CON Japan, its three consolidated subsidiaries and an equity-method affiliate, primarily
develops real estate leasing and real estate brokerage consulting businesses. Since its establishment in April
1995, it has focused on product planning and developed “Le JADE,” a for-sale condominium appealing tocustomers, mainly in the Tokyo metropolitan area and Kansai region and has expanded to various fields thatinclude a commercial development business generating community-rooted value, a hotel development
business responding to foreign tourist demand, logistics development and land readjustment projects, allthrough which it has established its position as a comprehensive developer. Currently, ES-CON Japan Groupadheres to a customer-first philosophy based on its second mid-term management plan “IDEAL to REAL
2019” (three years from the fiscal year ended December 2017 to the fiscal year ending December 2019) andwill continue to progress towards further evolution and growth as a company essential to society by fulfilling its
mission as a “life developer.”Amid continuous improvements in the employment and income environment, the business environment of
the real estate industry to which ES-CON Japan Group belongs remains steady and strong with low interest
rates due to monetary easing policies, yet ES-CON Japan Group recognizes that the future cannot be viewed
optimistically with the rise in land prices, intensified competition for acquiring land, and other factors.
Therefore, ES-CON Japan has not only formulated its own growth strategy but also has sought collaboration
with partner companies whom it can work with together in real estate businesses.
On the other hand, Chubu Electric Power, the business partner, seeks to make the real estate business,
which has an affinity with the energy business, a core business and contributing revenue base in its aim ofbecoming a corporate group with a consolidated ordinary income of more than 250 billion yen in the latter halfof the 2020s as detailed in the “Chubu Electric Power Group Management Vision” established in March 2018.
‐ 1 ‐The real estate business of Chubu Electric Power is currently implemented by Chuden Real Estate Co., Inc.
(hereinafter “Chuden Real Estate”) and maintains superiority in the real estate business of the Chubu region.
Chuden Real Estate aims to not only expand the scale and area of its businesses but also to make proactive
efforts in businesses that contribute significantly to society such as urban development and regional
revitalization businesses.
As a result of numerous discussions on the possibility of collaboration between ES-CON Japan and Chubu
Electric Power in the real estate business, an agreement to form a business partnership is to be reached as
generation of synergistic effects will become possible through utilization of the planning and businessknow-how on real estate business, which is a strength of ES-CON Japan, as well as the strengths of Chubu
Electric Power Group in the supplying of energy, a customer base in the Chubu region and know-how on
facility construction cultivated through the electric power business, all from which maximization of corporate
value of both companies can be expected.
Furthermore, ES-CON Japan will continue to conduct autonomous operation as a listed company andimprove corporate value after the formation of the business partnership.
2. Initiatives under Business Partnership
ES-CON Japan will focus on the following initiatives under the business partnership with Chubu ElectricPower.
(1) Initiatives on businesses contributing significantly to society such as urban development and regional
revitalization businesses
Urban development by Chubu Electric Power Group and provision of a new community to local residents will
become possible by utilizing ES-CON Japan’s planning and business know-how on real estate business andChubu Electric Power’s deep relationship with local residents.
(2) Enhancement of business base and improvement of corporate value through mutual complementation ofbusiness area and real estate business field.
Chubu Electric Power Group is involved in real estate leasing business mainly in the Chubu region while
ES-CON Japan conducts sales business of for-sale condominiums and real estate for lease in the Tokyo
metropolitan area, Kansai region and major cities in Fukuoka. Both companies are scheduled to jointly
conduct real estate business as well as prioritize the supply of energy from Chubu Electric Power and facility
construction for Chubu Electric Power Group regarding developed real estate by utilizing to the maximumextent the high complementarity in business area and real estate business field.
3. Overview of Business Partnership Agreement(1) Purpose
ES-CON Japan and Chubu Electric Power aim to maximize their corporate value by synergistically utilizing
various know-how and advantages that have been cultivated until now and by promoting joint projects in realestate business under a smooth and prompt cooperative relationship.
(2) Promotion of joint projects‐ 2 ‐Both companies will take the following measures for expanding the base of their customers and services andsharing business know-how and resources to further strengthen competitiveness in real estate business.
① ES-CON Japan and Chubu Electric Power will establish the Business Alliance Promotion Committee(tentative) and promptly conduct each measure to achieve the goal in the business partnership.
② With regard to energy supply and facility construction related to its development projects, ES-CON Japan

will select Chubu Electric Power Group as the top candidate upon deciding the supplier.
③ ES-CON Japan and Chubu Electric Power will conduct joint research and joint

implementation ofbusinesses concerning next-generation smart houses / connected homes, etc.
④ ES-CON Japan will select Chuden Real Estate Co., Inc. of the Chubu Electric Power Group as the top

candidate upon selecting the buyer of developed income properties which it owns.
⑤ Chubu Electric Power will select ES-CON Japan as the candidate for joint development upon considering

effective utilization and development of idle land or infrequently used land of Chubu Electric Power Group.
⑥ With regard to its own developed properties, ES-CON Japan will consider the participation of Chuden Real

Estate in joint businesses.
⑦ ES-CON Japan will strive to expand revenue of Chubu Electric Power Group’s real estate business andprovide continuous support to Chuden Real Estate for such expansion.
⑧ ES-CON Japan and Chubu Electric Power will proactively consider joint efforts in businesses contributing

to the society such as urban development business.
(3) Personnel Exchange
ES-CON Japan will continuously exchange personnel and transfer necessary employees (about a few to 10employees) to both companies depending on the business content in accordance with the content of theagreement reached through separate discussions to conduct the measures described in (2) above.
(4) Respect for Independence, etc.
ES-CON Japan and Chubu Electric Power shall mutually confirm their respect for ES-CON Japan’s
autonomous and agile management as a listed company unless presented with rational reasoning. In addition,
Chubu Electric Power shall consider the interests of ES-CON Japan’s minority shareholders and shall not
mandate ES-CON Japan to conduct any transactions that may cause unreasonable disadvantages to suchminority shareholders.
(5) Dispatch of Directors
In the case the total number of ES-CON Japan’s candidate directors other than members of the auditing
committee its upon submission of resolution to the General Meeting of Shareholders is 8, Chubu ElectricPower will nominate a director for ES-CON Japan. In the case the total number of candidate directors otherthan members of the auditing committee upon its submission of resolution to the General Meeting ofShareholders has been changed from 8, Chubu Electric Power will hold the right to nominate the number ofdirectors calculated by multiplying the number of candidate directors other than members of the auditing
committee by the ratio of the voting rights on ES-CON Japan’s outstanding shares held by Chubu ElectricPower to the total voting rights of ES-CON Japan and dividing it by 1.
‐ 3 ‐4. Acquisition of Shares of ES-CON Japan by Chubu Electric PowerChubu Electric Power is scheduled to conclude the share transfer agreement with Kouryu Oh, the largest andmajor shareholder of ES-CON Japan, Tenma Seiryu Co., Ltd., a major shareholder of ES-CON Japan, andtwo other shareholders as of August 28, 2018 and acquire 22,980,000 ordinary shares of ES-CON Japan(hereinafter “ES-CON Japan’s Shares”) through a negotiation transaction outside the market (hereinafter the“Share Transfer”) (ratio to the total number of ES-CON Japan’s outstanding shares: 32.08%).
As a result, ES-CON Japan is scheduled to become an equity-method affiliate of Chubu Electric Power.
In addition, with the Share Transfer, a change in the largest and major shareholder, major shareholders andother affiliated companies of ES-CON Japan is expected. Therefore, please refer to the press release “Noticeon Change in the Largest and Major Shareholder, Major Shareholders and Other Affiliated Companies”
announced separately today.
5. Overview of Counterparty in Business Partnership (as of March 31, 2018)
(1)
(2)
(3)
(4)
(5)
(6)

(7)

(8)

(9)

Name
AddressTitle and name ofrepresentative
Line of business
CapitalEstablishment

Chubu Electric Power Co., Inc.
1 Toshin-cho, Higashi-ku, Nagoya-shi, Aichi Prefecture
Satoru Katsuno, President & Representative Director

Electricity business and businesses incidental to it
430,777 million yen
May 1, 1951
Japan Trustee Services Bank, Ltd.
12.50%The Master Trust Bank of Japan, Ltd. 7.02%
Meiji Yasuda Life Insurance Company
5.21%
Nippon Life Insurance Company
3.46%
Chubu Electric Employees Shareholders' Association 2.51%
Major shareholders and
MUFG Bank, Ltd. 2.02%
holding ratio (as of March Sumitomo Mitsui Banking Corporation 1.97%
31, 2018)
STATE STREET BANK WEST CLIENT-TREATY 505234 1.54%(Standing proxy: Settlement & Clearing Services Department of Mizuho
Bank, Ltd.)
Mizuho Bank, Ltd. 1.40%
BNYMSANV AS AGENT/CLIENTS LUX UCITS NON TREATY 1 1.39%(Standing proxy: MUFG Bank, Ltd.)
Capital relationship
Not applicable
Personal relationship Not applicable
Relationship with listed
Business relationship Not applicable
companies
Status of relationship
Not applicablewith related parties
Consolidated management results and consolidated financial condition over the past three yearsFiscal year
Consolidated net assets
Consolidated total assets
Consolidated net assets per share
Consolidated sales
Consolidated operating income
Consolidated ordinary income
Profit attributable to owners of parent
Basic earnings per share
Dividends per share

Fiscal year
ended March 2016
1,637,109 million yen
5,538,945 million yen
2,112.80 yen
2,854,044 million yen
284,991 million yen
255,610 million yen
169,745 million yen
224.15 yen
25.00 yen

‐ 4 ‐Fiscal year
ended March 2017
1,724,713 million yen
5,412,307 million yen
2,225.66 yen
2,603,537 million yen
136,443 million yen
121,483 million yen
114,665 million yen
151.43 yen
30.00 yen

Fiscal year
ended March 2018
1,791,942 million yen
5,530,188 million yen
2,285.87 yen
2,853,309 million yen
136,505 million yen
128,532 million yen
74,372 million yen
98.24 yen
35.00 yen

6. Schedule
(1)
(2)
(3)
(4)

Resolution date by the Board of Directors
Date of conclusion of business partnership agreement
Date of conclusion of share transfer agreement
Acquisition date by Chubu Electric Power

August 28, 2018
August 28, 2018
August 28, 2018
September 7, 2018 (planned)

7. Future Outlook
The impact on the consolidated financial results of ES-CON Japan is currently under review and will beannounced immediately when there are any matters to be disclosed in the future.
II. Secondary Offering of Shares of ES-CON Japan
1. Outline of Secondary Offering(1)(2)

Number of shares to beoffered
Offer price(3)

Total offer price(4)

Owners and number ofshares to be offered(5)

Offering method

(6)
(7)
(8)
(9)

Subscription date
Delivery date
Advance on subscription
Unit of shares to be
subscribed
Other(10)Ordinary shares of ES-CON Japan

22,980,000 shares (planned)

1,150 yen per share(offer price is determined after having discussions with relatedparties)
26,427,000,000 yen(amount calculated by multiplying the number of shares to beoffered by the offer price)
Kouryu Oh
8,500,000 shares (planned)
Tenma Seiryu Co., Ltd.
5,390,000 shares (planned)
Sanai Housing Co., Ltd.
6,090,000 shares (planned)
Seiryu Asset Management Co., Ltd. 3,000,000 shares (planned)
Transfer of ordinary shares of ES-CON Japan to Chubu ElectricPower Co., Inc. by Kouryu Oh, Tenma Seiryu Co., Ltd., Sanai
Housing Co., Ltd. and Seiryu Asset Management Co., Ltd.
August 28, 2018
September 7, 2018 (planned)
Not applicable
100 shares
As for the above items, a securities notice based on the Financial
Instruments and Exchange Act has been submitted.

2. Purpose of Secondary Offering
In relation to the conclusion of the business partnership agreement between ES-CON Japan and Chubu
Electric Power, ES-CON Japan aims to transfer shares through secondary offering as a procedure defined inrelated laws and regulations since an agreement to transfer the shares of ES-CON Japan through anegotiation transaction outside the market is expected to be reached between Chubu Electric Power andKouryu Oh, Tenma Seiryu Co., Ltd., Sanai Housing Co., Ltd. and Seiryu Asset Management Co., Ltd.

‐ 5 ‐